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Bull Trap: Pulse-style one-day tour.

52 Comments 2024-04-11

In the recent market trends, a phenomenon has emerged.

The market occasionally triggers certain sectors, resulting in pulse-like surges in the market, but they are essentially one-day affairs.

Some say this is the main force protecting the market.

Others say this is the main force deceiving the market.

Still, others say this is the main force accumulating shares.

There are all kinds of opinions, but it is generally difficult to clearly explain why there are pulses within the market.

Most of the pulses within the market are ways for capital to vent emotions.

What is capital venting emotions?

It is the market's long-term lack of rise, in the process of falling, the emotions accumulated by the bulls, with no outlet.

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The bulls want to make a good market, want to make money, but the market is shrinking and falling, and the bear army is pressing down.The phrase "多方是一个被动防守,低吸的一个过程,被压的动弹不得" translates to "The bulls are in a passive defense, a process of low absorption, being suppressed and unable to move."

At this point, if the bulls want to make money, they must initiate a market trend.

Due to the lack of market turnover, they can only initiate a localized trend, and due to the insufficiency of following orders, they can only initiate a pulse-like trend.

Funds focus on breaking through a point, a sector, creating a short-term profit effect.

A sector, if it rises by 1%, cannot attract market attention.

Therefore, in a pulse-like trend, the sector will often see a short-term increase of 2-3% to attract the market's attention.

This allows the funds in the market that are looking for hot spots to find an outlet and follow the trend to gamble.

Why are one-day tours more common?

Because the bulls have completed the passive absorption, and after the market rises, there are following orders, and naturally, they will reduce their positions.

The so-called emotional venting is actually a short-term rapid rise and delivery.The moment the trend-following orders dry up, it naturally heads downwards.

This is how the pulse-like market movements come about.

Why are large sectors and heavyweight stocks often the focus?

The reason is quite simple: once the market experiences fluctuations in the index, more capital will reallocate and follow the trend.

Smaller sectors, even if they rise, elicit a relatively sluggish response from the market.

However, large sectors have a rallying power.

For example, pharmaceuticals, liquor, photovoltaics, chips, new energy, brokerages, and real estate.

When retail investors see the index rising, they naturally look for hot sectors.

Sectors at relatively lower levels are the most prone to creating illusions that the market is about to bottom out or is about to rise.

But if you can calmly think it through, you will find the problems within.In the current market, is there sufficient capital to initiate these high market value sectors?

If not, then it is doomed that the market conditions of these sectors are just a one-day trip, and there is no way to sustain it.

The pulse market is actually an inevitable occurrence in the market, which is a resonance of market capital, sentiment, and cyclical environment.

Of course, the pulse market will not last long and will go through a process of quantitative change to qualitative change.

First, let's talk about the quantitative change.

Quantitative change refers to the increasing number of pulses and the resulting changes.

Each pulse is a venting of the bullish sentiment.

It is also a signal for a group of followers who are optimistic about this direction to enter the market.

Although most of the followers will lose money after the pulse, it does not mean that these funds will leave the market and stop losses.Many trend-followers, because they are optimistic about the direction of this sector, will continue to increase their positions and buy in.

There is also a part that believes it is already at a low position, and if they buy and get trapped, they will hold it for the long term.

As the number of changes in volume increases, the situation of the chips will quietly change.

To put it bluntly, those who enter the market one after another to take over the plate will sooner or later be able to take over the plate, allowing the supply and demand relationship in the market to slowly undergo an essential change.

Therefore, the more times the pulse occurs, the more it is either trapping a group of people to go down.

If it is a low-level pulse, after a long time, it is accumulating a group of forces, and then breaking through upwards.

Let's talk about qualitative change.

Many markets, many stocks, before the official breakthrough, will have a pile of energy.

The so-called energy pile is the energy accumulated from time to time, or small phased markets, through the pulse.

Any pulse must be a volume increase in the rise.Of course, volume does not always indicate buying; there are many times when selling activities also take place.

However, volume implies divergence and consensus. After the pulse ends, those who buy are optimistic, and those who sell are pessimistic.

Qualitative change is breaking through the balance of bulls and bears, breaking through the critical point.

From a bearish trend to a bullish trend, if there are multiple pulse markets in between, it is a sign of the main force collecting chips.

So, having a pulse is definitely better than not having one.

It's just that, when the pulse is venting, when the pulse is collecting chips, and when the pulse becomes a breakthrough signal, this point needs special attention.

So, the index's pulse is not to protect the plate on the way down, but a prelude to the start of some sectors, and capital has begun to collect chips.

However, the volume of the pulse is limited, and the change of the trend requires a process, so there will be multiple pulses.

So, should you participate in the pulse market?The answer is inevitably negative, so do not participate.

If you can judge that the market trend is a pulse, then control your own hands.

Under the T+1 trading system, participating in a pulse market is no different from a moth flying into the fire, with no return.

If the market really wants to start, or if a certain sector really wants to start, it must be a continuous rise.

It is impossible to end in one day, and it is no problem to observe for 2-3 trading days.

It is nothing more than entering the market a little later and the cost is a bit higher.

But if a market really wants to start, it doesn't care about this cost.

This is like speculating in individual stocks to catch the leader, but the leader is not something that can be captured immediately on the first day of the rise, it takes 2-3 days to know which one is the real leader.

It is impossible to distinguish a pulse from a start within the market, and you can only find the difference after watching for one or two more days.

A sudden pull-up, especially not at the opening, but in the afternoon, especially in the afternoon, is basically not sustainable.The real main force that wants to take control of the chips moves step by step, climbing the ladder upwards.

This method of gradual advancement is the easiest way to get the chips into one's hands.

In the case of a rapid short-term rise, the chips that want to be sold will not come out immediately, and the volume released is mostly a self-directed and self-acted cross-transaction.

Once you understand the underlying logic, you naturally won't participate in the pulse market.

The process from quantitative change to qualitative change is too long, and waiting is the wisest choice.

Just like the overall market, only when the time-sharing graph that rises slowly appears, it is the sign of a phased bottom.

Those behaviors that are instantly pulled up in the market are mostly just a flash in the pan.

The market does not inherently have the concept of "protecting the market". The essence of "protecting the market" is that there is also capital willing to take the chips.

There are no philanthropists in the capital market, only capitalists, and in the game of chips, any action is correct.

As a participant, it is necessary to observe the changes in the market and make relatively accurate responses and judgments.Do not get involved if you cannot understand it, because it is a trap carefully set by others.

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